Biotech firms innovate for overseas markets
China's pharmaceutical industry is undergoing a notable transformation, as a growing number of domestic biotech firms extend their reach into global markets.
From pioneering international clinical trials to exploring new cross-border partnership models, Chinese companies are accelerating their presence in the global healthcare ecosystem.
A recent example is a lung cancer drug, sunvozertinib, developed by Wuxi, Jiangsu province-based Dizal Pharma, which was approved by the US Food and Drug Administration and added to the US National Comprehensive Cancer Network treatment guidelines.
The drug became the first China origin innovative drug approved in the United States for EGFR exon20ins-mutated non-small cell lung cancer.
This milestone reflects a broader shift — Chinese pharmaceutical firms are no longer content to innovate solely for the domestic market.
"China is transitioning from a pharmaceutical production powerhouse to a global innovation leader," Ma Jianchun, president of the China WTO Research Association, said at a recent life sciences forum in Beijing.
One clear indicator of this change is the growing adoption of international multiregional clinical trials (MRCTs). These trials help meet regulatory requirements across diverse populations in both Asia and the West.
According to Pharnexcloud, a Chengdu-based biopharmaceutical consulting firm, Chinese companies launched 336 MRCTs in 2024 and the number is expected to exceed 400 by the end of 2025.
"International trials need to start early — especially if your goal is more than just the domestic market," said Zhang Xiaolin, founder and CEO of Dizal Pharma.
His team led sunvozertinib through rigorous multinational trials, including collaborations with Harvard-affiliated hospitals, generating early-phase data across both Asian and non-Asian populations, a key requirement for FDA acceptance.
Alongside the global ambitions, Chinese biotech firms are increasingly entering licensing agreements with international partners to accelerate access to global markets.
According to data released by Soochow Securities, Chinese biotech companies signed 94 license-out deals worth $51.9 billion in 2024.
In the first quarter of 2025 alone, 33 such deals were completed, representing a year-on-year increase of 32 percent.
However, while traditional license-out deals bring capital and validation, many companies now prefer a more strategic structure — the New-Co model.
Instead of transferring rights outright to multinational firms, companies establish new overseas entities to house specific pipeline assets. These NewCos raise global capital, oversee clinical development, and allow Chinese firms to retain equity and decision-making influence.
According to an April 2025 report by Yongxing Securities, the NewCo model offers two main advantages: it enables early-stage assets to enter global markets without waiting for complete clinical datasets, using international capital to set globally competitive pricing, and it supports a diversified, scientifically structured revenue model, improving the likelihood of success.
The report projects that the New-Co model will become a key strategy for Chinese innovative drugs expanding overseas.
Public data show that by the first quarter of 2025, at least 13 NewCo transactions had been completed by Chinese companies, with a cumulative value exceeding $10 billion.
Policy support has helped facilitate developments in the biotech sector.
On July 1, the National Healthcare Security Administration and the National Health Commission jointly released a new commercial insurance reimbursement catalog to improve access to innovative medicines. Reforms to the STAR Market in Shanghai have also opened the door for pre-revenue biotech firms to go public, supporting early-stage innovation.
Industry experts have also called for clearer classification and protection mechanisms to safeguard truly original innovation.
Zhang Wenhu, secretary-general of the Drug Safety Cooperation Joint Conference, emphasized that genuine innovation demands heavy investment and deserves stronger protection.
"Original innovation involves far greater costs, time, and effort," Zhang said. "Pioneering drugs require massive R&D investments, while domestic clinical trial costs per patient remain far below international benchmarks. We must establish tiered incentives, such as extended exclusivity for breakthrough therapies, patent term adjustments, and streamlined reimbursement pathways."
Zhang added that unified policies covering market access, reimbursement access and hospital procurement will be essential for fostering a healthy innovation ecosystem.
